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February 26, 2013

Halfway There: 50% of Americans Need Better Savings Habits

National survey finds about half of Americans have goals, savings plans

Americans are split pretty neatly into good savers and bad savers, according to a national survey released as part of America Saves Week.

The survey, conducted by Opinion Research Corp. International for the Consumer Federation of America and the American Savings Education Council, which is managed by the Employee Benefit Research Institute, polled more than 1,000 investors by phone in February.

About half of respondents reported good savings habits, the study found. Fifty-four percent said they had specific goals and 43% said they had a spending plan that included saving part of their money. Forty-one percent regularly transfer money from their checking accounts to savings accounts by automatic transfers, and 49% said they knew their net worth.

The survey found a similar divide in retirement saving habits. Fifty percent of workers said they were contributing to a retirement plan and 49% said they were saving enough to have a “desirable standard of living” when they retire.

“According to the EBRI Retirement Security Projection Model, more than half of baby boomers and Gen-Xers will be able to retire with enough money to cover the cost of basic retirement needs as well as uninsured health care costs, assuming they retire at age 65 and retain any net housing equity in retirement until other financial resources are depleted,” Dallas Salisbury, chairman of ASEC and president and CEO of the Employee Benefit Research Institute, said in a statement. Still, “a significant number are simulated to be at risk of running short of money in retirement. They know they need to save more.”

Investors’ savings habits haven’t gotten any worse over the last 12 months, but they haven’t gotten any better, either. In 2012, 66% of respondents said they were spending less than they were saving or had enough cash saved for emergencies. Both categories were down one percentage point in 2013 to 65%.

“The recession still has not ended for millions of American families,” Stephen Brobeck, executive director of the Consumer Federation of America, said in a statement. “Many working families are still suffering from high unemployment rates, stagnant incomes and a housing market that is just beginning to recover.”